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    Sales Forecasting - New PDF

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    sakshay arora
    The document outlines techniques for sales forecasting, including qualitative and quantitative methods. It discusses factors that affect sales forecasts, both external factors like economic conditions and internal factors like inventory levels. Qualitative methods covered include executive opinion, the Delphi method, and surveys of buyer intentions. Quantitative methods analyzed are time series analysis, regression analysis, and market testing. The benefits and limitations of sales forecasting are also summarized.

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    Sales Forecasting - New PDF

    Uploaded by

    sakshay arora
    116 views20 pages
    The document outlines techniques for sales forecasting, including qualitative and quantitative methods. It discusses factors that affect sales forecasts, both external factors like economic conditions and internal factors like inventory levels. Qualitative methods covered include executive opinion, the Delphi method, and surveys of buyer intentions. Quantitative methods analyzed are time series analysis, regression analysis, and market testing. The benefits and limitations of sales forecasting are also summarized.

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    The document outlines techniques for sales forecasting, including qualitative and quantitative methods. It discusses factors that affect sales forecasts, both external factors like economic conditions and internal factors like inventory levels. Qualitative methods covered include executive opinion, the Delphi method, and surveys of buyer intentions. Quantitative methods analyzed are time series analysis, regression analysis, and market testing. The benefits and limitations of sales forecasting are also summarized.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    116 views20 pages

    Sales Forecasting - New PDF

    Uploaded by

    sakshay arora
    The document outlines techniques for sales forecasting, including qualitative and quantitative methods. It discusses factors that affect sales forecasts, both external factors like economic conditions and internal factors like inventory levels. Qualitative methods covered include executive opinion, the Delphi method, and surveys of buyer intentions. Quantitative methods analyzed are time series analysis, regression analysis, and market testing. The benefits and limitations of sales forecasting are also summarized.

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    of 20

    5/22/2018 SM-303 1

    Lecture Outline
    - Sales Forecasting
    - Factors effecting sales forecast
    - Qualitative and quantitative
    techniques of sales forecast

    5/22/2018 SM-303 2
    What is Forecasting?
    Sales
     A sales forecast is a projection of the expected
    customer demand for products or services at a
    specific company, for a specific time horizon, and
    with certain underlying assumptions
     Essential tool used for business planning,
    marketing, and general management decision
    making.
     Sales forecasting can help you achieve sales goals.
     Sales forecasting can help drive sales revenue,
    improve efficiency, increase customer retention and
    5/22/2018 SM-303 3
    reduce costs.
    Factors affecting sales
    forecasting
    External Factors

     Relative state of the economy


     Direct and indirect competition
     Styles or fashions
     Consumer earnings
     Population changes
     Weather

    5/22/2018 SM-303 4
    Factors affecting sales forecasting
    Internal Factors
     Labour problems

     Inventory shortages

     Working capital shortage

     Price changes

     Change in distribution method


     Production capability shortage
     New product lines

    5/22/2018 SM-303 5
    Sales Forecasting Methods
    Qualitative Quantitative

    Executive opinion method Time Series Analysis


    Delphi Method Market Test Method
    Sales force composite Regression Analysis
    method
    Survey of Buyer‟s intentions

    5/22/2018 SM-303 6
    Executive opinion method

     Most widely used


     Method of combining and averaging views of several executives
    regarding a specific decision or forecast.
     Leads to a quicker (and often more reliable) result without use of
    elaborate data manipulation and statistical techniques.
    Delphi Method
    Process includes a coordinator getting forecasts separately from
    experts, summarizing the forecasts giving the summary report to
    experts who are asked to make another prediction; the process is
    repeated till some consensus is reached

    5/22/2018 SM-303 7
    Sales force composite method
     Also known as “Grassroots Approach”
     Individual salespersons forecast sales for their
    territories
     Individual forecasts are combined & modified by
    the sales manager to form the company sales
    forecast.
     Best used when a highly trained & specialized
    sales force is used.

    5/22/2018 SM-303 8
    Survey of Buyer’s intentions

     Process includes asking customers about their


    intentions to buy the company‟s product and
    services
     Questionnaire may contain other relevant
    questions

    5/22/2018 SM-303 9
    Time Series Analysis

    Make forecasts based purely on historical patterns in


    the data. It has four components
     The Trend component-Gradual upward or
    downward
    movement over time.

    5/22/2018 SM-303 10
     The Cyclical Component
    Sales are often effected by swings in general
    economic activity as consumers have more or
    less disposable income available

    The Cyclical Component


    5/22/2018 SM-303 11
     The Seasonal Component
    It is a distinguished pattern to sales caused by
    things such as the weather, holidays, local
    customs and general consumer behaviour.

    The Seasonal Component

    5/22/2018 SM-303 12
     The Erratic events-Random Variations in data
    caused by change and unusual situations
     Time series analysis are accurate for short term
    and medium term forecasts and more so when
    demand is stable or follows the past behavior.
     Some of the popular techniques of time series
    analysis are:
     moving averages,
     exponential smoothing

    5/22/2018 SM-303 13
    Moving Averages

     The sales results of multiple prior periods are


    averaged to predict a future period
     Called „moving‟ because it is
    continually recomputed as
    new data becomes available,
    it progresses by dropping the
    earliest value and adding the
    latest value.

    5/22/2018 SM-303 14
    13
    Exponential Smoothing

     Similar to moving average method


     Used for short run forecasts
     Instead of weighing all observations equally in
    generating the forecast, exponential smoothing
    weighs the most recent observations heaviest
    Next year‟s sale=a(this year‟s sale) + (1-a)(this
    year‟s forecast)
    a is smoothing constant taken in scale 0-1

    5/22/2018 SM-303 15
    Market Test Method
     Used for developing one time forecasts particularly
    relating to new products
     A market test provides data about consumers'
    actual purchases and responsiveness to the various
    elements of the marketing mix.
     On the basis of the response received to a sample
    market test, product sales forecast is prepared.

    5/22/2018 SM-303 16
    Regression Analysis
     Identifies a statistical relationship between
    sales(dependent variable) and one or more
    influencing factors, which are termed the
    independent variables.
     When just one independent variable is considered
    (eg. population growth), it is called a linear
    regression, and the results can be shown as a line
    graph predicting future values of sales based on
    changes in the independent variable.
     When more than one independent variable is
    considered, it is called a
    5/22/2018
    multiple regression
    SM-303 17
    Benefits of Sales Forecasting

     Better control of Inventory


     Staffing
     Customer Information
     Use for Sales People
     Obtaining Financing

    5/22/2018 SM-303 18
    Limitations of Sales Forecasting

     Part hard fact, part guesswork


     Forecast may be wrong
     Times may change

    5/22/2018 SM-303 19
    5/22/2018 SM-303 20

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